This document contains a series of questions and prompts related to economics concepts like demand, elasticity, and determinants of demand. It includes examples of demand schedules and graphs to illustrate key ideas. Students are asked to analyze demand curves, identify price points that maximize revenue, and explain how changes described in various scenarios would impact demand. The document aims to help students learn how to apply concepts of demand, elasticity, and their determinants through examples, practice questions, and interactive activities on whiteboards and slates.

1. Quick review on slates
1. Which points
are possible?
2. How would E
become
possible?
3. What type of
firm
operates at
point F?
4. What type of
firm
operates at
point G?
F
G

4. A
E
C
B
D

5. On slates
1. What is missing
from this poster?
2. Why is that so
important?

6. On slates
1. How much would you be willing to pay for this
laptop computer? (what would be the most you
would be willing to pay)

7. Write answers on board
2. Factors might change our answers?

8. 2. Which allocation method does your family
use to distribute resources?
3. Which method do sellers ebay use?
4. Which method is used on Wall Street?
Brute force
First come, first serve
Rationing (usually equal)
Rationing by committee
Based on need (poorest)
Contest based
Random lottery
Auction – willing to pay

9. Economists like Auction too
We use price because it lowers
opportunity cost
Brute force
First come, first serve
Rationing (usually equal)
Rationing by committee
Based on need (poorest)
Contest based
Random lottery
Auction – willing to pay

10. 0
20
40
60
80
100
120
10.0 11.1 12.5 14.3 16.7 20.0 25.0 33.3 50.0 100.0
AT & T Stock$$$$
shares

11. Where do prices come from?
• XBOX1 OR PS4
• Demand
• The combination of how much people will buy
at a certain prices, at a certain time period
(week, month, year etc)
• Why important for entrepreneurs or
managers?

12. Conclude from this graph
Source: Hoovers 2011

13. Lower price
more sold

14. Next topic
• Topic: Law of Demand and Consumer Surplus
• Why important: It’s the consumption side of
our economy

15. What is “demand”?
• The amount of a good or service that a
consumer is willing and able to buy at various
prices during a given time period

16. Create Demand Schedule for laptop
Price Quantity Demanded
Graph on board
Show proper labels

17. Proper Economics Supply/Demand
Graph
Price
$$$$
P$
Quantity
# of goods/service
Q
TITLE: _______ ___ Market

19. Create Demand Schedule for PS4s
Price Quantity Demanded
Graph on board
Show proper labels

20. Proper Economics Supply/Demand
Graph
Price
$$$$
P$
Quantity
# of goods/service
Q
TITLE: _______ ___ Market

21. Demand Schedule
Cookies
Price Quantity Demanded per day
$0.20 7
$0.40 4
$0.60 2
$0.80 1
$1.00 1
$1.20 0

22. Demand Schedule
Cookies
Price QD*Day
$0.20 7
$0.40 4
$0.60 2
$0.80 1
$1.00 1
$1.20 0
P $
Quantity
Demand Curve
1.20
1.00
0.80
0.60
0.40
0.20
1 2 3 4 5 6 7

23. Why do firms care?
• Demand predicts revenue
• Revenue = Price X Quantity sold
Cookies
Price QD*Day Revenue
$0.20 7
$0.40 4
$0.60 2
$0.80 1
$1.00 1
$1.20 0

24. ON Slates
What price should this company choose if they
want to maximize revenue?

25. Revenue Maximization?
Widget Demand Schedule
Price
Quantity
Demanded
5 10
4 17
3 26
2 38
1 53
Demand curve reason ?
D

26. Law of Demand
Law of Demand: As price declines, quantity demanded
increases. As price increases, quantity demanded
decreases
Law of Demand: P Therefore Q demanded
P Therefore Q demanded
Demand curve always
slopes down

27. A linguistic problem
• Does P$ change
the actual
demand of a
good?
• NO, P$ change
only changes
quantity
demanded
• “thinking on the
margin”
• Chicken example
D

28. Sonic Commerical

29. Law of Demand at work
• Goods/Services that price changes cause changes in
quantity demanded
• Half price, “buy one, get one free”

31. D

32. Consumer Surplus
Consumer surplus is the difference between
the amounts people would willingly pay for
various amounts of specific goods and the
amounts they do pay at market prices.

33. Source:
Investopedia.
com

34. Demand Curve Experiment
Same paper
1. Conduct a demand curve experiment
2. Choose 1 good (snickers bars, monster drinks, movie
tickets, takis bags, AZ ice tea, “5” packs of gum or
Hershey bars)
3. Make up 5 price points
4. Survey 5 people and find out their demand per week
(write their names)
5. Graph the total demand on a correctly labeled graph
6. Label consumer surplus on graph
7. What price should this firm choose if they want to
maximize revenue?
8. Write an explanation of how the experiment shows the
law of demand in action
9. How might this firm use this information

35. On slates
1. 3 items you will buy more of when you start making
$30,000/year or more
2. 2 items you will buy less of when you start making $30,000/year
or more
3. Conclusion from this graph

36. Changes to demand
Does Demand change
when the price of a
good changes?
Only the Quantity
demanded changes
with price
Review:
What is the Q*D at
Price = $1.50?
When Q*D is at 50,
what is the price?
Revenue max?

37. D

40. D

41. Demand changes over time

42. Demand Vocab
• Normal goods – goods you buy more of when your
income increases
• Inferior goods – goods you buy less of when your
income increases
• Income Effect – changes to a person’s income changes
their demand
• “complements” – a good that is purchased with
another
• “substitutes” – a good which can be substituted for
another
• Substitution effect - Changes to prices of similar
goods changes people’s demand

43. Why is this important for firms?

45. What sorts of goods are these?
Others?
Compliments?
Normal/Inferior?

49. Cultural?
• Preferences change
• South Korea >>>>>

56. On slates
6. When would be a good time to sell normal
goods? (when the economy is….?)
7. When would be a good time to sell inferior
goods? (when the economy is…..?)
8. List two complements for tomatoes
9. List two substitutes for tomatoes

57. Determinants of Demand
• Causes that will change Demand

58. Determinants of Demand
• Tastes and preferences

59. Determinants of Demand
• Related goods: substitutes price and availability

60. Determinants of Demand
• Related goods: complements price and
availability

61. Determinants of Demand
• Income changes

62. Determinants of Demand
• Buyers and population
• Tucson during Gem Show, During summer

63. Determinants of Demand
• Expectations of future price

64. A trick to remember determinants
of demand
T R I B E
T = tastes of consumers
R = Related goods (P$ change)
I = Income of buyers
B = # of buyers
E = expectations of future price
http://quizlet.com/2043838/individual-markets-flash-cards/

65. White boards
Which part of TRIBE will
change in the following
scenarios to the Tucson
movie theater market?
1. Average wage in Tucson increases
2. Price of DVDs & flat screen TVs decrease
3. Population of Tucson doubles
4. New Spiderman movie comes out
5. KOLD reports movie tickets will increase 15%
in 2015
6. Xbox1 & PS4 hit the stores

66. ½ sheet of paper
• Identify the changes to the demand for tomatoes
Identify the part of TRIBE and increase or decrease or no change
1. New residents move to Arizona
2. Unemployment rises
3. The price of spaghetti noodles increases
4. Americans try to eat healthier and eat more salads
5. Americans try to eat healthier and eat less pizza
6. Price of tomatoes decreases
7. Average US income rises
8. V8 juice company goes out of business
9. The price of ground beef decreases
10. Media reports salmonella outbreak from California tomatoes
11. Consumers predict tomato prices to increase next month
12. Salsa becomes #1 US condiment
13. Price of tortilla chips triples
14. Make up your own example and explain demand change

67. On slates
1. Would you buy each of these goods if the price
quadrupled AND WHY?
Toothpaste ($2)
New XBOX & PS3 Video Games ($49)
Notebook paper ($0.10)
Sonoran Hot dog ($2.50)
Art Supplies ($8)
New Washing Machine ($400)
2. Get out your notes

68. Today’s topic: Elasticity
Responsive to price changes

72. Graph this demand curve in your notes
Price Quantity Demanded
$1.25 1
$1.00 3
$0.75 9
With your partner
What do you notice about this demand?
Do these consumers care about price?
What product might fit this demand?

73. If I really care about price….
• Elastic Demand
– Very responsive to
price change
– Many substitutes
– Big part of budget
– Don’t buy very often
– Why important to
think about as a
firm?
Price/month
Quantity
D-nice apartments
1000
500
100
1000 5000 10,000

74. Graph this demand curve in your notes
Price Quantity Demanded
$1.50 3
$1.00 4
$0.50 5
At your tables:
What do you notice about this demand?
Do these consumers care about price?
What product might fit this demand?

75. If I will still buy it
• Inelastic Demand
– Not responsive to price
change
– Few substitutes
– Small part of budget
– Why does government
often control prices of
inelastic goods?
– Illegal drugs?
Price/dose
Quantity
D-dialysis100
1 2 3
200
300
400
500
600
700

76. In Reality

77. Summary

78. Vincent Price
• Slates
• Product:
• Elastic/Inelastic Demand
• Short reason

79. On slates
1. Correctly draw the demand curve
for this market
2. What price should you choose to
maximize revenue?
3. What would happen to demand
if the average wage increased?
4. What would happen to demand
if soda was found to cause
diabetes?
5. What would happen to demand
if the price of juice tripled?
Klein – graph
on board

80. Soda Demand
D

81. In the market
for XboxOnes
A. Demand for
XboxOnes will
increase
B. Demand for
XboxOnes will
decrease
C. Quantity
demanded for
XboxOnes will
increase
D. Demand for PS4s
will increase

82. In the market
for PS4s
A. Demand for PS4s
will increase
B. Demand for PS4s
will decrease
C. Quantity
demanded for
PS4s will increase
D. Quantity
demanded for
PS4s will
decrease

83. Quantity
$
Graphically speaking… Demand of movie tickets
D*
A RAISE!!!!
A Child!!!!
D after raise

84. Klein Graph increase and decrease on
board

85. On a separate sheet of paper
Graphically sketch the changes to the demand curve, 1 curve won’t
change
Identify the part of TRIBE Label your graphs
1. Unemployment rises (steak)
2. New residents move to Arizona (houses)
3. The price of buns increases (hot dogs)
4. The internet gets more expensive (itunes mp3’s)
5. Unemployment rises (Canned Ham (SPAM))
6. You go to college (text books)
7. Average wage rises 10% (Hawaiian vacations)
8. Record bull market on Wall Street (used clothing)
9. The price of meat increases (A1 steak sauce)
10. Eegees releases a brand new flavor (slushies)
11. Gas prices increase to $6.50/gallon (bicycles)
12. Xbox360 games get cheaper (Xbox360 games)
13. Dept of Labor reports college grads earn more $$ (college degrees)
14. You read an article that gas prices will triple next month (gas)
15. Make up your own example and show demand shift
$
Q